It means logically investigating and processing information.
We have to,
- Compare information
- Explain why some information is important
- Explain the implication
It’s vital to use all the information available to you to have 360 degree assessment in any case.
It means logically investigating and processing information.
We have to,
- Compare information
- Explain why some information is important
- Explain the implication
It’s vital to use all the information available to you to have 360 degree assessment in any case.
In the exam to demonstrate the analysis, ask yourself three questions,
What information is available?
How do we compare information?
What does the conclusion/ Analysis means. (Its Impact)
What to do?
Gather maximum possible information (Financial accounts, Minutes of Board meeting, Industry research report etc.)
Give reasons of problems.
Recommend appropriate course of action.
Analysis of gearing problem or liquidity issue:
Here you should know that if any non-financial information or customer feedback related information is given then it doesn’t have any direct link with liquidity.
In this case you need to gather only relevant and important information which relates liquidity issue. Then you need to study the combined information that whether liquidity issue is there or not.
At the same time sometimes it may happen that two types of information may conflict like financial information interprets that there is no revenue growth in the company while Board of Directors interprets that company is growing well. So you need to highlight these points.
At the time of analysing financial information we need to calculate some key ratios related to gearing problem. But we need to remember that there is no importance of formula or calculations. Take into consideration only recent year’s information i.e. of current year and last year’s.
And at last after comparing whole data give the final outcome.
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